Apple 2005 Annual Report Download - page 81

Download and view the complete annual report

Please find page 81 of the 2005 Apple annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 4—Goodwill and Other intangible Assets (Continued)
Expected annual amortization expense related to acquired technology is as follows (in millions):
Amortization expense related to acquired intangible assets was $9 million, $7 million, and $10 million in 2005, 2004, and 2003, respectively.
Note 5—Restructuring Charges
Fiscal 2004 Restructuring Actions
The Company recorded total restructuring charges of approximately $23 million during the year ended September 25, 2004, including
approximately $14 million in severance costs, $5.5 million in asset impairments, and a $3.5 million charge for lease cancellations in
conjunction with the vacating of a leased sales facility related to a European workforce reduction during the fourth quarter of 2004. Of the
$23 million charge, $19.7 million had been utilized by the end of 2005, with the remaining $3.3 million consisting of $0.7 million for employee
severance benefits and $2.6 million for lease cancellations. These actions will result in the termination of 461 employees, 448 of which had
been terminated prior to the end of 2005.
The following table summarizes activity associated with restructuring actions initiated during 2004 (in millions):
Fiscal 2003 Restructuring Actions
The Company recorded total restructuring charges of approximately $26.8 million during the year ended September 27, 2003, including
approximately $7.4 million in severance costs, a $5.0 million charge to write-
off deferred compensation, $7.1 million in asset impairments, and
a $7.3 million charge for lease cancellations primarily related to the closure of the Company’s Singapore manufacturing operations during the
first quarter of 2003. Of the $26.8 million charge, all had been utilized by the end of 2005, except for approximately $1.7 million related to
operating lease costs on abandoned facilities. During the third quarter of 2003, approximately $500,000 of the amount originally accrued for
lease cancellations was determined to be in excess due to the sublease of a property sooner than originally expected and a shortfall
79
Fiscal Years:
2006
$
10
2007
8
2008
5
2009
1
2010
1
Thereafter
2
Total expected annual amortization expense
$
27
Employee
Severance
Asset
Lease
Benefits
Impairments
Cancellations
Totals
Total charge
$
14.0
$
5.5
$
3.5
$
23.0
Total spending through September 24, 2005
(12.4
)
—
(
0.9
)
(13.3
)
Total non
-
cash items
—
(
5.2
)
—
(
5.2
)
Adjustments
(0.9
)
(0.3
)
—
(
1.2
)
Accrual at September 24, 2005
$
0.7
$
—
$
2.6
$
3.3